Bosch employees to protest against sell-off of starter motors unit

Global auto components major planning to either sell-off or seek a partner for a joint venture for its starter motors and generators division

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Employees of Bosch’s starter motors and generators division here have joined colleagues in 13 countries to protest against the company’s plans to sell the unit. Around 600 employees of the division at the company’s Naganathapura plant, on the city’s outskirts, have served notice that they will stage a protest rally in front of the firm’s Indian headquarters here later this month.

“We have served a notice that we will observe a protest march very soon if they do not respond,” Prasanna Kumar, a representative of the Mico Employees Association, told Business Standard. Bosch in India was earlier known as Motor Industries Co Ltd, or Mico. “When the division was not doing enough business, they were in touch with employees on how to improve productivity. Now when they are planning to sell, they are not bothered to inform employees,” he said.

Bosch last month decided to seek a partner for a joint venture or a buyer for its starter motors and generators division as part of its plan to improve its growth prospects. The division develops and manufactures starters and alternators for automobiles. It employs around 6,500 associates at 13 manufacturing sites, including Naganathapura near Bengaluru.

Outside Germany, Bosch has manufacturing sites for starter motors and generators in Brazil, China, Hungary, India, Mexico, South Africa, Spain and the US. The division generated worldwide sales of 1.4 billion euros in 2014.

When contacted, a Bosch spokesperson said, “The market for starter motors and generators is extremely competitive and cost-driven. There is also considerable overcapacity in the market. The competitive pressure will become even tougher. And to remain competitive, the starter motors and generators division has to reach a leading global position in the market. For this, it needs to be of a sufficient size. Only in this way it can remain successful in the market over the long term.”

With a partner or new owner consolidation can be achieved and costs reduced. This was being done at a global level, the company added.

Bosch employs around 800 workers in the Naganathapura plant, where it manufactures starter motors and generators among other products. To mark their protest against the decision, employees of Bosch observed a token protest and held demonstrations on July 2. Around 2,000 employees protested at the company's headquarters in Stuttgart, Germany.

The division develops and manufactures starter motors and alternators that play an important part in reducing consumption. The products include the start-stop system, generators and machines for the boost recuperation system (entry-level hybrid).